EURUSD on Friday dropped -0.12% to 1.10737. Week ending 2024-09-13 moved lower by -0.12%. What happened.

EURUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.12%	-12.8 Pips
Week 2024-09-13	-0.12%	-13.5 Pips
September	-0.06%	-6.7 Pips

Upcoming key events for the new week (London Time)

Tue 01:30 PM Monthly Retail Trade (1-mth)
Wed 07:00 PM Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM Interest Rate Projections
Thu 01:30 PM Initial Unemployment Insurance Claims

What happened over the week

In the United States, the Index of Consumer Sentiment rose to 69 points in September from 67.9 points in August, according to the University of Michigan. Initial Unemployment Insurance Claims for the week ending 07 September increased to 230,000 from the previous 228,000, which was revised up from an initial 227,000 report by the Department of Labor. The Producer Price Index (PPI) for August showed a 1.7% annual increase, a decrease from the revised 2.2% in July, while the monthly PPI rose by 0.2% compared to 0.1% in the previous month, according to the Bureau of Labor Statistics. Additionally, the Consumer Price Index (CPI) inflation rate remained steady at 0.2% for August, with the annual rate decreasing to 2.5% from 2.9% in July, also reported by the Bureau of Labor Statistics.

In the Eurozone, the European Central Bank (ECB) announced a reduction in the interest rate on main refinancing operations (MRO) to 3.65% from 4.25%, and the deposit facility rate was also cut to 3.50% from 3.75%, effective from 18 September. This significant rate reduction was driven by the ECB’s assessment of the economic outlook and inflationary pressures in the Eurozone.

The recent economic data and policy decisions have had a mixed impact on the EURUSD currency pair. The drop in the ECB’s interest rates generally weakens the Euro as lower interest rates make Euro-denominated assets less attractive to investors. Conversely, the U.S. economic data, while showing some areas of concern like rising jobless claims, did not provide a strong enough counterbalance to the ECB’s rate cut. As a result, the EURUSD dropped by 0.12% on Friday to 1.10737. Looking ahead, the upcoming high-impact events, including the U.S. Monthly Retail Trade report, Federal Reserve’s Interest Rate Decision, and interest rate projections, as well as the initial Unemployment Insurance Claims, could trigger further volatility in the EURUSD pair depending on the outcomes.

From X (Twitter)

We cut our key interest rate by 0.25 percentage points.

We did this because inflation is gradually coming down and has been developing as we expected.

Read our monetary policy decisions https://t.co/Xk4mSWfMzH pic.twitter.com/IUNpRmPNNa

— European Central Bank (@ecb) September 12, 2024

The Consumer Price Index rose 2.5 percent over the past year https://t.co/gh7k2YcaLq #BLSdata pic.twitter.com/QYcXiZRiEY

— BLS-Labor Statistics (@BLS_gov) September 15, 2024

What can we expect from EURUSD for the new week and what happened on Friday?

EURUSD on Friday dropped -0.12% to 1.11. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-09-13, the pair dropped -0.12% or -13.5 pips lower.

Looking ahead, EURUSD looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 1.11 or at least consolidates above Weekly Pivot level of 1.11. On the downside, we are looking at week low 1.10 or 1.10 (WS1) as immediate support level. EURUSD need to break on either side to indicate a short-term bias. A close below week low of 1.10 would indicate selling pressure.

For the month of September, EURUSD is down by -0.06% or -6.7 pips lower.

Weekly key levels to watch out:

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